Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Norfolk Southern Corp. (NYSE:NSC)

Return on Capital (ROC)

Advanced level

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.


Return on Invested Capital (ROIC)

Norfolk Southern Corp., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,546  3,300  2,921  2,278  2,245 
Invested capital2 35,233  34,104  33,382  32,718  32,163 
Performance Ratio
ROIC3 10.06% 9.68% 8.75% 6.96% 6.98%
Benchmarks
ROIC, Competitors4
CSX Corp. 11.99% 12.00% 7.93% 7.82% 9.14%
FedEx Corp. 2.29% 9.75% 9.60% 5.72% 2.88%
Union Pacific Corp. 12.84% 12.47% 11.19% 10.44% 11.43%
United Parcel Service Inc. 14.07% 19.12% 22.35% 19.20% 29.60%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,546 ÷ 35,233 = 10.06%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Norfolk Southern Corp.’s ROIC improved from 2017 to 2018 and from 2018 to 2019.

Decomposition of ROIC

Norfolk Southern Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2019 10.06% = 36.44% × 0.32 × 86.16%
Dec 31, 2018 9.68% = 35.37% × 0.34 × 81.43%
Dec 31, 2017 8.75% = 35.12% × 0.32 × 78.84%
Dec 31, 2016 6.96% = 32.06% × 0.30 × 71.85%
Dec 31, 2015 6.98% = 28.64% × 0.33 × 74.55%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2019 year is the decrease in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Norfolk Southern Corp., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,546  3,300  2,921  2,278  2,245 
Add: Cash operating taxes2 570  753  784  893  766 
Net operating profit before taxes (NOPBT) 4,116  4,053  3,705  3,171  3,011 
 
Railway operating revenues 11,296  11,458  10,551  9,888  10,511 
Profitability Ratio
OPM3 36.44% 35.37% 35.12% 32.06% 28.64%
Benchmarks
OPM, Competitors4
CSX Corp. 42.19% 40.49% 32.47% 30.23% 31.42%
FedEx Corp. 2.35% 8.39% 9.35% 7.14% 5.13%
Union Pacific Corp. 40.69% 38.05% 39.75% 38.00% 38.59%
United Parcel Service Inc. 8.61% 9.36% 11.69% 9.16% 13.28%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Railway operating revenues
= 100 × 4,116 ÷ 11,296 = 36.44%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Norfolk Southern Corp.’s OPM improved from 2017 to 2018 and from 2018 to 2019.

Turnover of Capital (TO)

Norfolk Southern Corp., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Railway operating revenues 11,296  11,458  10,551  9,888  10,511 
Invested capital1 35,233  34,104  33,382  32,718  32,163 
Efficiency Ratio
TO2 0.32 0.34 0.32 0.30 0.33
Benchmarks
TO, Competitors3
CSX Corp. 0.34 0.36 0.35 0.34 0.39
FedEx Corp. 1.31 1.22 1.25 1.15 1.31
Union Pacific Corp. 0.38 0.40 0.39 0.37 0.41
United Parcel Service Inc. 2.04 2.25 2.26 3.05 3.06

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08).

1 Invested capital. See details »

2 2019 Calculation
TO = Railway operating revenues ÷ Invested capital
= 11,296 ÷ 35,233 = 0.32

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Norfolk Southern Corp.’s TO improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Effective Cash Tax Rate (CTR)

Norfolk Southern Corp., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,546  3,300  2,921  2,278  2,245 
Add: Cash operating taxes2 570  753  784  893  766 
Net operating profit before taxes (NOPBT) 4,116  4,053  3,705  3,171  3,011 
Tax Rate
CTR3 13.84% 18.57% 21.16% 28.15% 25.45%
Benchmarks
CTR, Competitors4
CSX Corp. 17.12% 17.21% 29.78% 24.96% 24.68%
FedEx Corp. 25.81% 4.95% 17.70% 30.29% 57.17%
Union Pacific Corp. 16.87% 18.82% 26.90% 26.21% 28.34%
United Parcel Service Inc. 19.83% 9.23% 15.59% 31.24% 27.12%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 570 ÷ 4,116 = 13.84%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Norfolk Southern Corp.’s CTR decreased from 2017 to 2018 and from 2018 to 2019.